Day 4
Today we covered an important aspect of game theory called mechanism design - how to design allocation and payment rules for a set of agents that are making a collective choice, while ensuring that the rules guarantee truthful revelation (incentive compatibility or IC) by every agent and every agent plays an equilibrium strategy (individual rationality or IR). Due to time constraints, we mainly discussed the very fundamental concepts of social choice functions (scf), mechanisms and looked at simple scf-s that satisfy IC and IR along with the Vickrey-Clarkes-Grove or VCG mechanism. In the second half of today's sessions we had a brief discussion on position auctions around Hal Varian's eponymous paper and finally, we discussed an application of auctions in multi-robot task allocation. Relevant slides and pointers are below:
Mechanism Design slides
Hal Varian's paper on Position Auctions (covered partially in class):
Varian, Hal R., 2007. "Position auctions," International Journal of Industrial Organization, Elsevier, vol. 25(6), pages 1163-1178, December.[pdf]
Mechanism Design slides
Hal Varian's paper on Position Auctions (covered partially in class):
Varian, Hal R., 2007. "Position auctions," International Journal of Industrial Organization, Elsevier, vol. 25(6), pages 1163-1178, December.[pdf]
Related books for further reading (links to Amazon Website):
Krishna: Auction Theory
Bergman and Morris: Robust Mechanism Design
Mas-Colell, Whinston, Green: Microeconomics Theory (chapters 21, 22 on Mechanism Design)
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